The Fracking Industry Deserves Our Gratitude

It has given America virtual energy independence, freeing it from the leverage of often hostile Middle East regimes. Less than ten years ago, America’s energy future looked bleak. World oil prices in 2008 had spiked to more than $100 per barrel of crude. “Peak oil” — the theory that the world had already extracted more crude oil than was still left in the ground — was America’s supposed bleak fate. Ten years ago, rising gas prices, spiraling trade deficits, and ongoing war in the oil-rich Middle East only underscored America’s precarious dependence on foreign sources of oil. Despite news of a radically improved but relatively old technology called “fracking” — drilling into shale rock and injecting water, sand, and chemicals at high pressure to hydraulically “fracture” the rock and create seams from which petroleum and natural gas are released — few saw much hope. In 2012, when gas prices were hitting $4 a gallon in some areas, President Obama admonished the country that we “can’t just drill our way to lower gas prices.”

That was a putdown of former Alaska governor and vice-presidential nominee Sarah Palin’s refrain “Drill, baby, drill.” Obama barred new oil and gas permits on federal lands. Steven Chu, who would become secretary of energy in the Obama administration, had earlier mused that gas prices might ideally rise to European levels (about $10 a gallon), thereby forcing Americans to turn to expensive subsidized alternative green fuels. But over the last five years, frackers have refined their craft on private properties, finding ever cheaper and more efficient ways to extract huge amounts of crude oil and natural gas from shale rock. In 2017, despite millions of square miles being off limits to drillers, America is close to reaching 10 million barrels of crude-oil production per day, the highest level in the nation’s history.

The U.S. may soon surpass Saudi Arabia as the world’s largest petroleum producer. When American natural gas (about 20 percent of the world total) and coal (the largest reserves in the world) are factored into the fossil-fuel equation, the U.S. is already the largest producer of energy in the world. While environmentalists worry about polluting the water table and heightening seismic activity through hydraulic fracturing, fracking seems to become more environmentally sensitive each year. When OPEC and other overseas producers tried to bankrupt frackers by flooding the world with their supposedly more cheaply produced oil, the effort backfired. American entrepreneurs learned to frack oil and natural gas even more cheaply and undercut the foreign gambit. The result is a windfall for all sectors of the American economy. From 2014 to 2016, fracking helped cut the price of gasoline by $1.50 a gallon, saving American drivers an average of more than $1,000 per year. Due to the fracking of natural gas, the United States has reduced its carbon emissions by about 12 percent over the last decade (according to the Energy Information Administration) — at a far greater rate than the environmentally conscious European Union. Fracking and cheaper gas are allowing a critical breathing space for strapped American consumers, as alternative energy production and transportation slowly become more efficient and competitive. Fracking has created a national savings of about 5 million barrels of imported oil per day over the last decade. That translates to roughly $100 billion in annual savings by avoiding foreign oil. Fracking has created a national savings of about 5 million barrels of imported oil per day over the last decade. That translates to roughly $100 billion in annual savings by avoiding foreign oil. Fracking has allowed the U.S. to enjoy some of the lowest electricity rates and gas prices in the industrial world. The result is that cheap energy costs are luring all sorts of energy-intensive industries — from aluminum to plastics to fertilizers — back to the United States, with the potential of creating millions of new, high-paying jobs.

Fracking has given America virtual energy independence, freeing it from the leverage of unstable and often hostile Middle East regimes. The result is less need to interfere in the chronic squabbling in the oil-rich but unstable Persian Gulf. Fracking has reduced oil prices and radically weakened America’s rivals and enemies. Desperate oil exporters like Iran, Russia, and Venezuela are short about half the oil income that they enjoyed ten years ago. The late Hugo Chávez’s oil-fed socialist utopia in Venezuela is bankrupt. What so far constrains Russian president Vladimir Putin is as much a shortage of petrodollars as fear of NATO. Until recently, the combination of sanctions (lifted by the Obama administration) and crashing oil prices had nearly bankrupted would-be nuclear power Iran. The once-feared OPEC oil cartel, the longtime bane of the United States, is now nearly impotent. Friends such as Israel have gained energy independence by fracking. In contrast, some European allies who have banned fracking out of environmental worries are more vulnerable to Russian, Iranian, and Middle Eastern pressure than ever before. Fracking is not easy. It requires legally protected property and mineral rights, a natural entrepreneurial spirit, environmental concern, and a free-market. In other words, it is an American way of doing business.

Fracking and cheaper gas are allowing a critical breathing space for strapped American consumers, as alternative energy production and transportation slowly become more efficient and competitive.

This is the key sentence. This “breathing space” (bad choice of words) should be thankfully used to carry out the energy transition. Fracking is offering a bridge that can turn peak oil into peak oil demand, as it should.

Fracking has allowed the U.S. to enjoy some of the lowest electricity rates and gas prices in the industrial world.

Oil prices are world prices and nearly the same everywhere. The reason why a kwh is so cheap in the US is because of lack of energy taxes. Electricity prices in the EU are artificially high, which is good because they stimulate the energy transition more than in the US, since they make renewable energy (artificially) competitive… until we can drop the qualifier “artificially”, when renewable energy source will have matured.

The consequence will be that the Anglo 7 Big Sisters of oil could be replaced by Continental European 7 Big Brothers of renewable energy.

Shell is the only half Anglo – half continental European oil company that has understood the signs of the times… because of EU energy policies, that don’t exist on US federal level.

“It is an American way of doing business.” Unrepayable debt, unreported pollution, and rapid depletion missing from the storyline. Corporate America at it’s finest. And as far as a virtual energy independence, see the chart in the previous article,Fossil Fuel Empire which shows the large gap between consumption and production. It’s getting more difficult for the BAUers to synthesise their message together with the reality. Virtual independence is much like virtual sex, it only exists in the mind of the participant.

“Shale Gas Revolution” is still a teenager. However, the volume of operational and financial evidence demonstrating that natural gas shales “work” is overwhelming at this point. This evidence leaves no doubt, in my view, that North America is well supplied with low-cost natural gas (NYSEARCA:UNG) for at least a decade, and possibly much longer. Given that natural gas shortages were a clear and present danger as recently as 2008, this is a true paradigm shift for the continent’s energy security (and, arguably, the world’s energy security).

During the new technology’s early years, shale skepticism was understandable. However, at this point, “peak gas” and “gas shales do not work” claims have largely moved into the category of conspiracy theories.

Kenz300 on Thu, 6th Jul 2017 9:51 am

Wind and solar power along with electric vehicle adoption with give us true independence.

“At least 20 people died and 50,000 were ordered to evacuate as the heaviest rainfall on record pounded the southwestern Japanese island of Kyushu. Rainfall of 10.1 centimetres (about 4 inches) per hour was recorded in the southern region of Kagoshima.”

“It has given America virtual energy independence”. Again so thankful they expose their stupidity in the first sentence so I don’t have to read further.

Apneaman on Thu, 6th Jul 2017 5:52 pm

Dear Fracking – Asia thanks you.

Too much rain: China’s floods roil hydropower, corn supplies

“BEIJING (Reuters) – Severe flooding across southern China has forced the world’s largest power plant to slash capacity on Tuesday, delayed grain on barges and damaged farms along the Yangtze River, as the death toll rose to 56 and economic costs hit almost $4 billion.

Heavy rainfall, mudslides and hail caused by the annual rainy season has killed 56 people and 22 people were missing across 11 provinces and regions as of Tuesday morning, according to the Ministry of Civil Affairs.

More than 750,000 hectares (1.85 million acres) of crops have been damaged and direct economic losses totaled more than 25.3 billion yuan ($3.72 billion), it said.”

5-7% more moisture in the atmosphere for every 1C of warming, so even a 10th of a degree makes the BOMBS bigger. Most of the infrastructure was not built to take this level of pounding and especially not repeatedly and it’s only going to get worse every year.

Rain Bombs keep falling on their heads…………

gwb on Thu, 6th Jul 2017 8:23 pm

How predictable — the author, Victor Davis Hanson, is a well-known right-wing hack, writing in the right-wing mouthpiece National Review

deadlykillerbeaz on Fri, 7th Jul 2017 3:16 am

I thought the word ‘frack’ was used in cartoons and such, like when you see a cartoon of a bird and the word ‘frack’ appears in the caption. lol

Haliburton Oil Well Cementing Company was issued a patent for the procedure in 1949. The method successfully increased well production rates and the practice quickly spread. It is now used throughout the world in thousands of wells every year. Our gasoline, heating fuel, natural gas and other products made from petroleum products would cost a lot more if hydraulic fracturing had not been invented.

Anon… the eia.gov in the website address makes that an unlikely possibility. I see all of the current shale oil games ending when, in the near future, they go bankrupt. Many things will change to the negative long before 2025.

I for one AM grateful to the fracking industry, and equally grateful to the propaganda machine and financial skullduggery that has enabled and sustained the fracking industry these last 8 – 10 years without which fracking would have never gotten off the ground. I am also grateful the FED/CB printing machines that flooded into fracking. And last but not least I am grateful to all the many SUCKERS who put their (and my via 401K) hard-earned bucks into fracking bonds and investments. The reason I am grateful is because if the fracking industry had not been launched, then industrial civilization as we know it would have crashed and burned long ago. The fracking industry has given me time to recognize where we are headed and to prepare for it the best I can. Fracking industry, thank you.